Correlation Between Alior Bank and Blackrock World
Can any of the company-specific risk be diversified away by investing in both Alior Bank and Blackrock World at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Alior Bank and Blackrock World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alior Bank SA and Blackrock World Mining, you can compare the effects of market volatilities on Alior Bank and Blackrock World and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Alior Bank with a short position of Blackrock World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alior Bank and Blackrock World.
Diversification Opportunities for Alior Bank and Blackrock World
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alior and Blackrock is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Alior Bank SA and Blackrock World Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock World Mining and Alior Bank is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Alior Bank SA are associated (or correlated) with Blackrock World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock World Mining has no effect on the direction of Alior Bank i.e., Alior Bank and Blackrock World go up and down completely randomly.
Pair Corralation between Alior Bank and Blackrock World
Assuming the 90 days trading horizon Alior Bank SA is expected to generate 5.76 times more return on investment than Blackrock World. However, Alior Bank is 5.76 times more volatile than Blackrock World Mining. It trades about 0.03 of its potential returns per unit of risk. Blackrock World Mining is currently generating about -0.21 per unit of risk. If you would invest 7,950 in Alior Bank SA on September 23, 2024 and sell it today you would earn a total of 0.00 from holding Alior Bank SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alior Bank SA vs. Blackrock World Mining
Performance |
| Timeline |
| Alior Bank SA |
| Blackrock World Mining |
Alior Bank and Blackrock World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alior Bank and Blackrock World
The main advantage of trading using opposite Alior Bank and Blackrock World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alior Bank position performs unexpectedly, Blackrock World can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Blackrock World will offset losses from the drop in Blackrock World's long position.| Alior Bank vs. Toyota Motor Corp | Alior Bank vs. SoftBank Group Corp | Alior Bank vs. OTP Bank Nyrt | Alior Bank vs. Freeport McMoRan |
| Blackrock World vs. Synchrony Financial | Blackrock World vs. Alior Bank SA | Blackrock World vs. St Galler Kantonalbank | Blackrock World vs. Regions Financial Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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